Latest Posts

SELL YOUR HOME CHECKLIST


Read More

How Construction Loans Work???

Once you have qualified for and been approved for a construction loan, the lender begins paying out the money they agreed to loan to you. However, they are not just going to give the builder the cash all at once. Instead, a schedule of draws is set up.

Read More

What Is a Home Construction Loan – Process & How to Qualify

Read More

Commonly Asked Questions About Construction Loans

What is a construction loan?

Construction loans enable a new home to be built through the duration of construction. They are reflective of the time needed to build your home, and typically range from six months to a year. Once you have secured a construction loan, your lender will pay your builder after each interval of work is completed. Once construction ends, your loan repayment begins.

Many homebuyers choose the convenience of having their construction loan combined with their standard mortgage plan, in something called a construction-to-permanent loan. This eliminates the need to refinance after construction and undergo two separate closings.

How do construction loans work?

Your builder will outline how much money is required to build your home, segmenting expected costs into intervals of work. Your lender will compensate your builder after each interval, usually per month, once they have independently verified that the designated work has been completed.

When do you pay?

With most construction loans, you only pay interest on the amount of money that is drawn out each month. You will begin to repay your lender for the bulk costs after your home is completed. If the project is builder-financed, the construction loan is the builder’s responsibility and the buyer will not need to pay anything at all until the end of construction.

Compare Construction Loan vs. Traditional Home Loan


Construction loans work differently than traditional home loans. If you need help buying a home that is already built, whether new or old construction, a traditional home loan is right for you. If you want to build a home from scratch on your own lot of land, or buy a prospective home within a builder’s development, a construction loan is the way to go.

Construction Loan

  • 20%–30% down payment required

  • High interest rates

  • Incremental loan disbursements

  • More complicated to qualify for, and few options available

  • Bank issued

  • Must have specific building plans, construction contract, and cost estimate to apply

Traditional Home Loan

  • 3.5%–20% down payment required depending on mortgage type

  • Low interest rates

  • Loan disbursement in one lump sum

  • Easier to qualify for, and more options available

  • Mortgage-company issued

  • Must only have essential personal finance information to apply

Read More

What Home Loan Will Suit You The Best...?

What Home Loan Will Suit You The Best...?

Read More

Is Now a Good Time to Rent?

Is Now a Good Time to Rent? | Keeping Current Matters

Read More

Which Comes First... Marriage or Mortgage?

Which Comes First... Marriage or Mortgage?

Read More

#1 Reason to Sell Now Before Spring

The #1 Reason to Sell Now Before Spring

Read More

Rent or Buy, Either Way You're Paying a Mortgage!

Whether You Rent or Buy, Either Way You're Paying a Mortgage!

Read More

Mortgage Interest Rates Predictions!

Where Are Mortgage Interest Rates Headed in 2018?

Read More

Major Myths Holding Back Home Buyers

Major Myths Holding Back Home Buyers

Read More

Days on the Market Drops to New Low in 2017!

Days on the Market Drops to New Low in 2017

Read More

The Impact Staging Your Home Has on Sales Price

The Impact Staging Your Home Has on Sales Price 

Read More

Thinking of Selling? Now is the Perfect Time!

Thinking of Selling? Now is the Perfect Time!

Read More

2 Charts That Show the Truth about Home Affordability

2 Charts That Show the Truth about Home Affordability

Read More

The Cost of NOT Owning Your Home

            The Cost of NOT Owning Your Home

Read More

5 Reasons to Sell This Winter!

              5 Reasons to Sell This Winter!

Read More

7 CONSIDERATIONS WHEN PREPARING TO SELL YOUR HOME

7 CONSIDERATIONS WHEN PREPARING TO SELL YOUR HOME

Read More

Search Listings